SEC Study on Investment Advisers and Broker-Dealers

During the week of January 17, 2011, three studies were released in accordance with the Dodd‐Frank Act: the first was prepared by the Government Accounting Office on the regulation of financial planners. The second was prepared by the Securities and Exchange Commission (SEC) on the oversight of investment advisers, specifically whether a self‐regulatory organization (SRO) is warranted.

The final study, also prepared by the SEC, addressed the appropriate standard of care for investment advisers and broker‐dealers. This third study has garnered the most attention, and likely will have the most impact on the industry.  The SEC recommended that investment advisers and broker‐dealers should be held to a uniform fiduciary standard of conduct. This action would create a significant change for broker-dealers, which historically have not been held to this higher standard.

Click here for an analysis of the SEC study by Don Trone of Strategic Ethos, and click here to read the full version of the SEC study.